Tesla and SolarCity have reached an agreement over the $2.6 billion (£2 billion) bid, and it now only awaits approval from the companies’ shareholders.
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The point of the buyout is to combine the two companies into Musk’s plan all along for a “vertically integrated sustainable energy company”.
With Tesla and SolarCity, development of consumer solar panels, home battery storage systems and electric cars can be developed and marketed under one brand, according to CNBC.
“Now is the right time to bring our two companies together”, read a statement from Tesla on the company blog.
On Monday, SolarCity said that it experienced lower-than-expected residential bookings in the first half of the year, so it’s reducing its full-year guidance for megawatts installed to a range of 900 to 1,000 megawatts. The all-stock transaction would give SolarCity shareholders 0.110 Tesla common shares per SolarCity share.
SolarCity has until September 14 to solicit for buyers under a “go-shop” period. Musk owns a 26 percent stake in Tesla Motors Inc., based in Palo Alto, California, and a 22.5 percent stake in SolarCity Corp., which is based in nearby San Mateo, California.
“This is an action now which is anticipating several moves ahead”, Musk said.
“We’ll be able to provide energy at a lower cost than traditional forms of energy”, he said.
The electric-car maker’s adjusted loss per share came in at $1.06, and adjusted revenue was $1.56 billion. Neither company has turned a profit, although SolarCity CEO Lyndon Rive said he expects the company to have positive cash flow in the final quarter of the year.
Musk is the largest shareholder in both companies and is chairman of SolarCity.
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The Reuters analysis factored in a stock swap that is a key element of the US$2.6 billion merger announced on Monday by both companies. Shares of Tesla and SolarCity were both down slightly in trading today. Power could be gathered through SolarCity’s solar panels and then routed into a Tesla Powerwall; that electricity could then be use to run appliances inside the structure, or perhaps, y’know, charge the Model S in the garage.
